drop to 50% earlier but right now at this noon hour we are looking at the probability climbing to about 53%. Now that reversal does follow comments from Fed Governor Chris Waller who signaled he could support a holding rate study at the central bank's meeting in two weeks if inflation keeps cooling. And with the September 11th CPI report on the horizon, traditional inflation data is under intense scrutiny. This has geopolitical tensions in the Middle East drive energy prices higher and at a time when we're looking at volatile treasury yields. Now, recent PC numbers show price pressures do remain sticky, while hawkish remarks from Kevin Walsh do suggest monetary policy may not be restrictive enough. But To understand where inflation and interest rates are really headed, Wall Street is increasingly looking at real-time on-chain economic metrics. So joining us this afternoon to weigh in is Stefan Rust, who is Chief Executive Officer of Truflation. Stefan, good afternoon. Thank you so much for joining us. So here we are counting down not just to the jobs number tomorrow morning, but also inflation figures next week. But what is Truflation's real-time index telling you right now that government reports might be missing.
Hey Remy, thanks for having me. Great to be here. Yeah, look, we're, you know, good question, right? I think after Jackson Hole, Walsh gave a bit more of a hawkish view. Waller today sort of saying, implying rates are going to hold steady. We had the G20 meeting. Everybody was talking about growth. It was all about leaning in. Elon Musk coming in talking about global growth hitting a 20% mark. Everybody's pretty excited on where the economy's going. Right now, Trueflation is a now-casting service. We aggregate and provide the truth associated with real-time economic and financial data. And our economic data is telling us that inflation is running at about 2.3%, which is below the 3.5% that the government is proclaiming. We've seen an uptick, though, in those numbers. That said, though, we sort of think that the inflation, if now casted, would show a lower number and much more in line with the 2%-ish that the Warsh is looking for and that the Federal Reserve Board is aiming to hit.
And of course, I do want to get your take on energy because in New York afternoon trade, we're looking at elevated levels for both WTI as well as Brent, WTI back around the $90 barrel level, as well as Brent back around $96, $95 a barrel. It goes without saying that conflict in the Middle East is something that does remain an uncertainty. So would you say the energy surge is threatening a second wave of inflation, or do you think that consumer service spending is still the main driver? Can you break this down for us?
I mean, energy has such a big impact. The cost of oil has such a big impact across the economy. So price movements do trickle down into the price of gas at the pump, your utility bills, transportation, flights, et cetera, et cetera. And so it does matter. AC bills, you name it. Gas has an impact on that. price movements do trickle down, you know, where and until we get a resolution around the whole moves that is somewhat stable, which I don't think we'll see anytime soon, we're going to see volatility in gas prices. And there's a lot of sort of built in The actual pricing that we're seeing at the pumps and in the utility bills, they're not going to move that fast. And so we don't think that's actually going to hit. I think the services category is going to have a bigger impact. We see it growing with the latest report that came out, the ISM report. Services jumped to the largest extent. Business activity is high. Demand and new orders are up. Prices are moving up. At the wholesale level, unemployment is staying pretty much flat. And so those are sort of things that are having greater impact in the cost of living and the CPI.
Yeah, and as you mentioned, we are continuing to monitor energy prices. But when we take a step back, it's not just crude oil. It's also not gas for other economies around the world. And it's also diesel here in the U.S. But when it comes to the role of interest rates in the U.S., would you say that the economy has become insensitive to rates where they are right now? Are money market yields actually fueling more consumer spending or not?
They definitely have an impact, right? Interest rates, credit card debt, everything's tied to interest rates. So we need to get the interest rates down in order to drive and stimulate spending, in order to bring down government budgets. All of those, the debt that the government, the federal treasury is sitting on, $40 trillion is coupled with that interest rate that's out there. The yield curves are moving upwards. So we're seeing a lot of activity around interest rates. Interest rates do matter, and it does stimulate the economy. Being able to buy a house, is tied to mortgage rates. Mortgage rates are up at six to seven percent, depending where you are. So it costs, people aren't refinancing, people aren't buying new houses at these rates, and the cost of housing is expensive as a result of interest rates staying high. The Warsh in his presentation in Jackson Hole again highlighted the fact that he's looking at two factors. So it's not just inflation. Remember, he's also looking at employment. Employment in the US is still really high. We have about 4% unemployment rates. We're in a sort of low-hire, low-fire environment. So there's not much activity taking place. And ultimately, That is showing good signs and holding interest rates today. Maybe there's going to be a surprise if we're going to see growth and activity. Will we see a surprise drop in interest rates before the end of the year? That is something that actually we think is a possibility.
And finally, Stefan, before I let you go, I do want to get your perspective on the implications of inflation. So if inflation does remain sticky heading into your end, how much higher can long end yields go before they start affecting the stock market in terms of valuations? I mean, it's really money supply that's driving the price of assets. And we're seeing M2 grow significantly. It's continuing to grow. So there's more money moving into circulation. Where does that money go? Regardless of where the yield is at, the money is going into assets. And hence, we're seeing valuations of companies rise significantly as the money moves into buying stocks and equities. On the yield side, we're still seeing the whole world look at US dollar treasury yields as an asset. Wealth managers around the world and ultra high net worth individuals are buying treasuries and just holding treasuries because the yield or the interest rates on those treasuries are actually extremely attractive. If you're earning 6% a year, that's actually a nice income. And that's where people view the US economy, the US treasury bill as a safe haven, especially if you can borrow against that up to 90%. It's actually a very attractive form of money.
Well, Stephan, we will have to leave it there, but I appreciate your time this afternoon. Thank you so much for joining us and thank you so much for sharing all of your insights.
Thank you, Remy. Thanks for having me.
